When picking a deal team, consider experience, but also temperament

Charlie Crowley is a managing director at Boenning & Scattergood. His investment banking practice is focused on helping banks to raise capital and complete M&A transactions.

If your company is ready to sell, you have a lot to think about.Is this the right time? How will your employees and customers be affected? Will you get an adequate price? Will the non-financial terms of the deal be acceptable? What can you do to maximize your potential for success?Having the right deal team in place — particularly the right attorneys and investment bankers — is essential. While cost may be a factor, it generally should be way down the list. In this once-in-a-lifetime opportunity, these questions are more important:

Will the professionals have the appropriate deal experience and expertise? This is no time to hire your brother’s friend just because he seems like a good guy. Also, you should resist the temptation to try a less experienced professional because you think he or she might be hungrier than a deal veteran. On-the-job training can be expensive. You should ask to see detailed deal lists, and check references.

Have they done deals like yours? Perhaps a transaction attorney has done a great job with entrepreneurs and the sales of closely held businesses, but he hasn’t dealt with a public company like yours. Perhaps the investment banker is very good at selling widget manufacturers, but he wouldn’t necessarily know of all the strategic and financial buyers focused on your industry. The more specialized the industry, the more experienced the deal professionals need to be in it.

Will your deal be important to them, but not too important? These days, most good corporate and securities attorneys and investment bankers are somewhat busy. While the CEO generally understands that he or she is not the only client of the lawyer or investment banker, the CEO still needs and should expect excellent customer service.It is important to try to gauge whether your deal will be important to the firm and the individual professionals, or whether you will be way down the to-do list. If the deal list shows that the investment banking firm may focus on $100 million-plus deals, your $20 million deal could be lost in the shuffle. On the other hand, you don’t want to be too important to the professionals. The attorney may not complete your work quite as efficiently, and the investment banker may have other motivations if he hasn’t had a reasonably active track record of success. For instance, the investment banker in that situation could push you to take a deal that would not be in your best interest.

Do your deal professionals have the right temperament? Every deal has its ups and downs, some as extreme as Cedar Point roller coasters. The CEO probably never has been through this, but hopefully the advisers have on many occasions. When cooler heads do not prevail, legal costs and tempers can go up, and deals can come crashing down.The best legal and financial advisers are generally those who can be strong advocates for their client while maintaining a calm demeanor under pressure. You want the quarterback who looks cool in the two-minute drill while others on the field appear nervous and flustered. Also, you want solutions-oriented advisers who can get knocked down in one area, but who can get right back up and think of other approaches.By having the right team in place upfront, you will dramatically increase your chances for success.

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